“Hotel for Pets” Is Deemed Not Income-Producing

by: Anthony F. Della Pelle
1 Jun 2017

The Township had a bone to pick with plaintiffs who filed appeals of a property that consisted of a pet boarding kennel.  In Pittius v. Old Bridge Twp., the subject property consisted of one residential improvement and another improvement which consisted of a boarding kennel for animals.

The property is classified as a 4A (commercial) given that there was a pre-existing kennel business.  As is the case for most commercial properties, the Township’s assessor sent plaintiffs a Chapter 91 request for income and expense information in 2015.  Plaintiffs responded by indicating that the property was owner-occupied.   After plaintiffs filed their 2016 complaint with the Tax Court and upon completion of review of plaintiffs’ standard and supplemental interrogatories, the Township filed a motion to dismiss arguing that it was not aware that a kennel was being operated at the property.  The Township argued that as a “hotel for pets,” the “boarding of animals constitutes an income-producing activity for the use of real estate” like that of hotels and nursing homes.  Furthermore, the Township alleged that there was a discrepancy in the ownership name of the property & kennel business and thus the prior assertion [on the 2015 Chapter 91 request] that the property was owner-occupied was false and fraudulent.

The Tax Court rejected the Township’s motion for several reasons.  First, although the business owners do appear to be different individuals from the property owners, there was no rent being collected at either building (residential and boarding kennel).  Noting that there was no lease or any income derived from real estate, the court rejected the Township’s allegation that plaintiffs’ Chapter 91 response was false or fraudulent.  Second, pet kennels are not analogous to income-producing nursing homes.  The court stated that one obvious difference is the users, one being of “different species.”  In addition, akin to a license to temporarily use the property, the court indicated that “temporary stay in a kennel is not the same as the privacy, exclusivity of use and possession, and security of a nursing home, hotels, or even a cabana.”

A copy of this opinion can be found here.